TSX: JAG
TORONTO, March 29, 2018 /CNW/ - Jaguar Mining Inc.
("Jaguar" or the "Company") (TSX: JAG) today announced details
of the Company's financial and operating results for the fourth
quarter ("Q4 2017") and year ended December
31, 2017 ("FY 2017"). Complete Financial Statements and
Management's Discussion and Analysis are available on SEDAR and on
the Company's website at www.jaguarmining.com. All figures are in
US dollars, unless otherwise expressed.
"We are pleased with the strong operating cost performance in
the fourth quarter and the year overall. In the second half of 2017
we significantly reduced total expenses due to a sharp focus on
cost consciousness and improving productivity across the Company,"
said Rodney Lamond, President and
Chief Executive Officer, Jaguar Mining. "We successfully deployed
capital towards high priority exploration projects which have
yielded excellent results including a significant increase in
mineral resources as we have worked to develop Pilar. In 2017,
Pilar delivered the highest level of gold production since 2013 and
record average feed grade over the life of the mine. These results
have translated into increased production expectations for Pilar
going forward."
"Looking to 2018, we are maintaining our guidance range between
95,000 – 105,000 ounces, including Pilar. We are in a good position
to see our lower expense-base translate to lower overall operating
costs per ounce on a relatively less volatile Brazilian currency,
as we expect to deliver increased production compared to 2017 and
we have temporarily suspended operations at the higher cost
Roca Grande Mine. We continue to be
focused on increasing operating cash flow, investing capital in
sustaining and growth projects and reducing debt. Delivering the
highest profitable ounce production is a top priority, as becoming
a lower cost producer is key to building shareholder value."
Q4 2017 Key Financial Highlights
- Operating costs decreased in Q4 2017 by 19.8% to $15.5 million, compared with $19.4 million in Q4 2016 due to focused efforts
on delivering profitable production and company-wide expense
reduction programs.
- Net income of $16.0 million and
earnings per share $0.05 compared to
net loss of $9.3 million and
($0.03) net loss per share in Q4
2016.
- Increased realized gold price of $1,278 per ounce, compared to $1,205 per ounce for Q4 2016, partially offset
lower gold sales in Q4 2017. Revenue of $26.6 million, compared with $30.3 million in Q4 2016 due to lower production
in Q4 2017.
- Cash operating costs ("COC") of $745 per ounce sold, compared to $735 in Q4 2016 and $809 in Q3 2017.
- All-in sustaining costs ("AISC") of 1,104 per ounce sold,
compared to $1,098 in Q4 2016 and
$1,168 in
Q3 2017.
- Operating cash flow of $5.4
million, in line with expectations. Invested total capital
of $6 million, including $4.9 million in sustaining capital
expenditures.
- Free Cash Flow was $0.5 million
and negative $5.1 million for Q4 2017
and FY 2017 respectively, based on operating cash flow less
sustaining capital expenditures, compared to $2.3 million and $12.4
million in Q4 2016 and FY 2016 respectively.
- 2018 gold production guidance of 90,000–105,000 ounces.
- Cash balance of approximately $18.6
million as of December 31,
2017, compared to a cash balance of $19.2 million at September
30, 2017.
FY 2017 Key Financial Highlights
- Lower year-over-year gold production of 84,152 ounces compared
to 96,608 ounces in 2016.
- Net loss of $2.8 million and
($0.01) net loss per share compared
to net loss of $82.8 million and
($0.50) net loss per share in
2017.
- Invested total capital of approximately $24.6 million in 2017, which yielded significant
exploration success from $4.6 million
invested in exploration drilling. Increased definition, infill and
exploration drilling metres by 28% to 48,498 meters compared to
2016.
- Cash operating costs of $837 per
ounce of gold sold and AISC of $1,212
per ounce of gold sold.
2017 Fourth Quarter and Financial Results Summary
|
|
|
($ thousands, except
where indicated)
|
Three months
ended
December 31,
|
Twelve months
ended
December 31,
|
|
2017
|
2016
|
2017
|
2016
|
Financial
Data
|
|
|
|
|
Revenue
|
$
26,626
|
$
30,261
|
$
105,231
|
$
120,539
|
Operating
costs
|
15,526
|
19,355
|
69,140
|
71,012
|
Depreciation
|
5,302
|
10,153
|
22,572
|
35,752
|
Gross
profit
|
5,798
|
753
|
13,519
|
13,775
|
Net income
(loss)
|
16,034
|
(9,280)
|
(2,830)
|
(82,795)
|
|
Per share
("EPS")
|
0.05
|
(0.03)
|
(0.01)
|
(0.50)
|
EBITDA1
|
22,927
|
3,037
|
26,871
|
(38,671)
|
|
Adjusted
EBITDA1,2
|
7,698
|
6,348
|
21,711
|
36,648
|
|
Adjusted EBITDA per
share1
|
$
0.02
|
$
0.02
|
$
0.07
|
$
0.22
|
Cash operating costs
($ per ounce sold)1
|
745
|
735
|
837
|
719
|
All-in sustaining
costs ($ per ounce sold)1
|
1,104
|
1,098
|
1,212
|
1,099
|
Average realized gold
price ($ per ounce sold)1
|
1,278
|
1,205
|
1,256
|
1,239
|
Cash generated from
operating activities
|
$
5,387
|
$
8,467
|
$
14,968
|
$
37,781
|
Free cash
flow1
|
502
|
2,295
|
(5,071)
|
12,363
|
Free cash flow ($ per
ounce sold)1
|
24
|
91
|
(61)
|
127
|
Sustaining capital
expenditures1
|
4,885
|
6,172
|
20,039
|
25,419
|
Non-sustaining
capital expenditures1
|
1,111
|
1,648
|
4,582
|
4,429
|
Total capital
expenditures
|
$
5,996
|
$
7,820
|
$
24,621
|
$
29,848
|
1 Average
realized gold price, sustaining and non-sustaining capital
expenditures, cash operating costs
and all-in sustaining costs, free cash flow, EBITDA and Adjusted
EBITDA and Adjusted EBITDA per share
are non-IFRS financial performance measures with no standard
definition under IFRS. Refer to the
Non-IFRS Financial Performance Measures section of the
MD&A.
|
2 Adjusted
EBITDA excludes non-cash items such as impairment and write
downs.
For more details refer to the Non-IFRS Performance Measures section
of the MD&A.
|
|
Three months
ended
December 31,
|
Twelve months
ended
December 31,
|
|
2017
|
2016
|
2017
|
2016
|
Operating
Data
|
|
|
|
|
Gold produced
(ounces)
|
21,311
|
25,407
|
84,152
|
96,608
|
Gold sold
(ounces)
|
20,841
|
25,110
|
83,750
|
97,277
|
Primary development
(metres)
|
908
|
1,091
|
3,574
|
5,462
|
Secondary development
(metres)
|
677
|
1,205
|
3,969
|
4,751
|
Definition, infill,
and exploration drilling (metres)
|
13,973
|
9,914
|
48,498
|
37,860
|
Cash Position and Working Capital
- As at December 31, 2017, the
Company had a cash balance of $18.6
million, compared to a cash balance of $26.3 million, as at December 31, 2016. During the fourth quarter, the
Company received $2 million from
Avanco for the second installment of the Accelerated Earn-in
Agreement signed for the Gurupi Project on September 17, 2017.
- Stable working capital of $14.1
million as at December 31,
2017 compared to $11.3 million
as at December 31, 2016.
2018 Guidance
- 2018 guidance for Turmalina Gold
Mine ("Turmalina") and Caeté Mining Complex ("CCA") Pilar
Gold Mine ("Pilar") and Roça Grande Mine ("RG").
- Pilar production guidance increased to 39,200 - 47,000
reflecting re-forecast for increased mineral resources reported in
March 2018.
- RG performance reflects production from January 1 to March 21, 2018 as RG temporarily
placed on care and maintenance.
|
|
|
|
2018 Production
& Guidance cost
|
|
CCA
|
|
Turmalina
|
Pilar
|
RG
|
Consolidated
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Gold production
(ounces)
|
50,000
|
57,000
|
39,200
|
47,000
|
800
|
1,000
|
90,000
|
105,000
|
Cash Operating Cost
(US$/oz sold)
|
675
|
775
|
650
|
800
|
1,000
|
1,100
|
660
|
800
|
All-in sustaining
cost (US$/oz sold)
|
900
|
1,000
|
900
|
1,050
|
1,050
|
1,200
|
920
|
1,100
|
Sustaining Capex
(US$'000)
|
12,000
|
15,000
|
9,000
|
12,000
|
100
|
500
|
22,000
|
28,000
|
Development
|
|
|
|
|
|
|
|
|
|
Primary waste
(m)
|
2,200
|
2,800
|
2,000
|
2,600
|
N/A
|
N/A
|
4,500
|
5,400
|
|
Secondary ore
(m)
|
1,800
|
2,100
|
1,000
|
1,150
|
N/A
|
N/A
|
3,000
|
3,500
|
Definition, infill
and exploration drilling (m)
|
18,000
|
25,000
|
14,000
|
20,000
|
200
|
300
|
35,000
|
50,000
|
2017 Exploration Success and Highlights
- The Company completed 13,973 metres and 48,498 metres of
definition, infill, and exploration drilling during the three and
12 months ended December 31, 2017,
respectively (Q4 2016 and FY 2016 – 9,914 metres and 37,860 metres
respectively) focused on current orebody extensions at depth at
both Turmalina and Pilar.
- Year-End 2017 Pilar Mineral Reserves and Mineral Resources
Highlights:
-
- Total Measured Resources increased 277% to 317,000 ounces of
gold, net of depletion, grading 4.47 g/t. Total Measured and
Indicated ("M&I") Resources increased 10% to 532,000 ounces of
gold at 4.37 g/t.
- Inferred Resources increased 104% to 433,000 ounces grading
5.69 g/t, reflecting successful growth exploration drilling
campaign in 2017 targeting high-grade deeper extensions to the
principle banded iron formation orebodies.
- Proven and Probable ("2P") Mineral Reserves of 125,000 ounces
of gold, grading 3.99 g/t reflecting two-year replacement of
mineral reserve depletion through production and addition of new
mineral reserves.
- Interim Year-End 2017 Turmalina Mineral Resources
Highlights:
-
- M&I Resources of 420,000 ounces of gold reflect full
replacement of 45,000 ounces of 2017 mining depletion for Orebodies
A, B and C. Measured Resources increased 8% to 265,000 ounces with
a 6% increase in grade to 5.7 g/t.
- Inferred Resources increased 158% to 305,000 ounces of gold
with a 14% increase in grade to 5.49 g/t, reflecting successful
growth exploration drilling campaign in 2017 targeting high-grade
deeper extensions to the orebodies.
The Iron Quadrangle
The Iron Quadrangle has been an area of mineral exploration
dating back to the 16th century. The discovery in 1699–1701 of gold
contaminated with iron and platinum-group metals in the
southeastern corner of the Iron Quadrangle gave rise to the name of
the town Ouro Preto (Black Gold).
The Iron Quadrangle contains world-class multi-million-ounce gold
deposits such as Morro Velho, Cuiabá, and São Bento. Jaguar holds
the second largest gold land position in the Iron Quadrangle with
just over 25,000 hectares.
About Jaguar Mining Inc.
Jaguar Mining Inc. is a Canadian-listed junior gold mining,
development, and exploration company operating in Brazil with three gold mining complexes and a
large land package with significant upside exploration potential
from mineral claims covering an area of approximately 64,000
hectares. The Company's principal operating assets are located in
the Iron Quadrangle, a prolific greenstone belt in the state of
Minas Gerais and include the Turmalina Gold Mine Complex and Caeté
Mining Complex (Pilar and Roça Grande
Mines, and Caeté Plant). The Company also owns the Paciência
Gold Mine Complex, which has been on care and maintenance since
2012. Additional information is available on the Company's website
at www.jaguarmining.com.
Forward-Looking Statements
Certain statements in this news release constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking statements and
information are provided for the purpose of providing information
about management's expectations and plans relating to the future.
All of the forward-looking information made in this news release is
qualified by the cautionary statements below and those made in our
other filings with the securities regulators in Canada. Forward-looking information contained
in forward-looking statements can be identified by the use of words
such as "are expected," "is forecast," "is targeted,"
"approximately," "plans," "anticipates," "projects," "anticipates,"
"continue," "estimate," "believe" or variations of such words and
phrases or statements that certain actions, events or results
"may," "could," "would," "might," or "will" be taken, occur or be
achieved. All statements, other than statements of historical fact,
may be considered to be or include forward-looking information.
This news release contains forward-looking information regarding,
among other things, expected sales, production statistics, ore
grades, tonnes milled, recovery rates, cash operating costs,
definition/delineation drilling, the timing and amount of estimated
future production, costs of production, capital expenditures, costs
and timing of the development of projects and new deposits, success
of exploration, development and mining activities, currency
fluctuations, capital requirements, project studies, mine life
extensions, restarting suspended or disrupted operations,
continuous improvement initiatives, and resolution of pending
litigation. The Company has made numerous assumptions with respect
to forward-looking information contained herein, including, among
other things, assumptions about the estimated timeline for the
development of its mineral properties; the supply and demand for,
and the level and volatility of the price of, gold; the accuracy of
reserve and resource estimates and the assumptions on which the
reserve and resource estimates are based; the receipt of necessary
permits; market competition; ongoing relations with employees and
impacted communities; political and legal developments in any
jurisdiction in which the Company operates being consistent with
its current expectations including, without limitation, the impact
of any potential power rationing, tailings facility regulation,
exploration and mine operating licenses and permits being obtained
an renewed and/or there being adverse amendments to mining or other
laws in Brazil and any changes to
general business and economic conditions. Forward-looking
information involves a number of known and unknown risks and
uncertainties, including among others: the risk of Jaguar not
meeting the forecast plans regarding its operations and financial
performance; uncertainties with respect to the price of gold,
labour disruptions, mechanical failures, increase in costs,
environmental compliance and change in environmental legislation
and regulation, weather delays and increased costs or production
delays due to natural disasters, power disruptions, procurement and
delivery of parts and supplies to the operations; uncertainties
inherent to capital markets in general (including the sometimes
volatile valuation of securities and an uncertain ability to raise
new capital) and other risks inherent to the gold exploration,
development and production industry, which, if incorrect, may cause
actual results to differ materially from those anticipated by the
Company and described herein. In addition, there are risks and
hazards associated with the business of gold exploration,
development, mining and production, including environmental
hazards, tailings dam failures, industrial accidents and workplace
safety problems, unusual or unexpected geological formations,
pressures, cave-ins, flooding, chemical spills, procurement fraud
and gold bullion thefts and losses (and the risk of inadequate
insurance, or the inability to obtain insurance, to cover these
risks). Accordingly, readers should not place undue reliance on
forward-looking information.
For additional information with respect to these and other
factors and assumptions underlying the forward-looking information
made in this news release, see the Company's most recent Annual
Information Form and Management's Discussion and Analysis, as well
as other public disclosure documents that can be accessed under the
issuer profile of "Jaguar Mining Inc." on SEDAR at www.sedar.com.
The forward-looking information set forth herein reflects the
Company's reasonable expectations as at the date of this news
release and is subject to change after such date. The Company
disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law. The forward-looking information contained in this news release
is expressly qualified by this cautionary statement.
Non-IFRS Measures
This news release provides certain financial measures that do
not have a standardized meaning prescribed by IFRS. Readers are
cautioned to review the above stated footnotes where the Company
expanded on its use of non-IFRS measures.
- Cash operating costs and cash operating cost per ounce are
non-IFRS measures. In the gold mining industry, cash operating
costs and cash operating costs per ounce are common performance
measures but do not have any standardized meaning. Cash operating
costs are derived from amounts included in the Consolidated
Statements of Comprehensive Income (Loss) and include mine-site
operating costs such as mining, processing and administration, as
well as royalty expenses, but exclude depreciation, depletion,
share-based payment expenses, and reclamation costs. Cash operating
costs per ounce are based on ounces produced and are calculated by
dividing cash operating costs by commercial gold ounces produced;
US$ cash operating costs per ounce produced are derived from the
cash operating costs per ounce produced translated using the
average Brazilian Central Bank R$/US$ exchange rate. The Company
discloses cash operating costs and cash operating costs per ounce,
as it believes those measures provide valuable assistance to
investors and analysts in evaluating the Company's operational
performance and ability to generate cash flow. The most directly
comparable measure prepared in accordance with IFRS is total
production costs. A reconciliation of cash operating costs per
ounce to total production costs for the most recent reporting
period, the quarter ended December 31,
2017, is set out in the Company's fourth quarter 2017
Management Discussion and Analysis (MD&A) filed on SEDAR
at www.sedar.com.
- All-in sustaining cost is a non-IFRS measure. This measure
is intended to assist readers in evaluating the total costs of
producing gold from current operations. While there is no
standardized meaning across the industry for this measure, except
for non-cash items the Company's definition conforms to the all-in
sustaining cost definition as set out by the World Gold Council in
its guidance note dated June 27,
2013. The Company defines all-in sustaining cost as the sum
of production costs, sustaining capital (capital required to
maintain current operations at existing levels), corporate general
and administrative expenses, and in-mine exploration expenses.
All-in sustaining cost excludes growth capital, reclamation cost
accretion related to current operations, interest and other
financing costs, and taxes. A reconciliation of all-in sustaining
cost to total production costs for the most recent reporting
period, the quarter ended December 31,
2017, is set out in the Company's fourth quarter 2017
MD&A filed on SEDAR at www.sedar.com.
SOURCE Jaguar Mining Inc.